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Irish businesses more upbeat on recovery - survey

Almost three quarters of Irish firms surveyed are more concerned about individual measures in the Budget rather than the size of the overall adjustment

The outlook for Irish business is continuing to improve with a significant increase in the number of companies reporting better activity levels in the past three months.

The Autumn business sentiment survey from KBC Bank Ireland and Chartered Accountants Ireland said that nearly half of those businesses surveyed also expect the recovery to continue into the next quarter.

Nearly three quarters saw the Budget as being important to their prospects but they were more concerned about individual measures rather than the size of the overall adjustment.

"Only 16% of respondents say that whether the adjustment is €3.1 billion or a little less is the key issue for them while 70% are focussed on what specific measures might be introduced," said KBC Bank Ireland's chief economist Austin Hughes.

"This may reflect a measure of concern that some spending and tax changes could threaten a still tentative recovery. So, Irish business seems a little nervous about the risk of unpleasant Budget surprises," he added.

The Autumn survey showed that more firms increased rather than cut their staff numbers for the fifth quarter in a row. However KBC noted that new employment is linked to proven needs by companies rather than planned expansions.

Commenting on today's survey, the chief executive of Chartered Accountants Ireland said that while gains in activity were seen across most sectors, it was important to note that the strongest improvement was seen in construction and other property related activities.

"Clearly, this is coming from a very weak base and the turn in this sector remains tentative but it is hinting at healthier domestic economic conditions in the coming year," Pat Costello added.